“Since I joined in November 2006 [then as financial manager], it’s been a struggle. We’ve managed to keep this plant alive, sometimes just barely, but I knew that to survive longer term, we needed an OEM, and we needed funding – we’ve received none at all for the past 3 years. Now we have both.”

MLM views its acquisition of a share of BMW’s business [reported in Vol. 6 No. 4] as a major step forward, and it has been investing in new equipment for that production.

“Operating capital for the BMW contract is also quite high – there’s a 2-month lead time, so to hold 3 months’ stock of wet blue costs R15 million.”

MLM will continue with and expand its other business, he said. It has the machine capacity to process 1 200 hides/day, or around 100 000 m˛/month.

It has been supplying the local aftermarket for years, and has now secured an ongoing aftermarket export contract, supplying 20 000 m˛/month.

Furniture upholstery leather will remain part of MLM’s business.

One company that won’t be revived is MIA, the sewing plant joint venture between Mario Levi SpA and Allied Trim Components (ATC) that was housed at MLM and that supplied Fiat. “Most of the machinery was sold back to ATC,” he said. “We kept a few machines which we use to supply vinyl components, via Faurecia, to Ford South Africa for its bakkie programme. No, it’s not leather and it’s therefore not our core business, but Ford is an OEM and anything can happen.”

MLM is currently buying its wet blue hides from Midland Tannery, African Hide Trading and Cape Produce Company. “The cost of the wet blue is where your margins are,” he said. “Wet blue suppliers expect to be paid on 7 days – sometimes with a deposit – but during the very tough times, Benjy [Lapiner, MD of CPC] stuck his neck out and gave us longer terms.

MLM currently employs 111 monthly- and weekly-paid staff, and will take on another 30-50 as it ramps up for BMW. – [Tel: +27 (0)41 995 6703, email: William@mariolevi.co.za]